If money triples in value in 8 years,what nominal rate of interest compounded semi-annually is being earned?
A)7.11%
B)7.36%
C)14.22%
D)14.72%

Question

Quizplus · Accepted Answer

To solve the problem, we need to use the formula for compound interest:

FV = PV*(1+i)^n

Where:
FV = Future value (triple the present value)
PV = Present value (1)
i = Interest rate
n = Number of periods

Using the given information, we have:

3 = 1*(1+i)^16

Solving for i, we get:

i = (3)^(1/16) - 1

i ≈ 0.1422

Therefore, the nominal rate of interest compounded semi-annually is 14.22%, which is answer choice C.

If Money Triples in Value in 8 Years,what Nominal Rate